IPO-bound Swiggy cuts losses by 43% to Rs 2,350 crore in FY24

Zomato rival Swiggy has reported a substantial rise in its operating revenue and a significant cut in losses for fiscal year 2024 (FY24). 

The Bengaluru-based company achieved a 36% rise in operating revenue, reaching Rs 11,247 crore, according to its annual report. Alongside this growth, Swiggy reduced its annual losses by 44%, bringing them down to Rs 2,350 crore. 

Still far from Zomato

While Swiggy has shown significant improvement in its business, it still lags behind Deepinder Goyal-led Zomato.

In comparison, Zomato's revenue surged by 71% in FY24, reaching Rs 12,114 crore, with Rs 6,161 crore coming from its food delivery business and Rs 2,301 crore from its grocery delivery service, Blinkit.

As of July, Blinkit held the largest market share in the quick commerce sector, with Swiggy’s Instamart ranking second, followed by Zepto and BigBasket.

Additionally, the Gurugram-based foodtech giant has consistently reported profits, which is a key growth factor for any listed company in the Indian bourses.

In the fourth quarter of FY24, Zomato reported a consolidated net profit of Rs 175 crore, a 26.8% increase from Rs 138 crore in Q3FY24. Overall, the company made a profit of Rs 351 crore in FY24.

Surge in food delivery business growth

Swiggy's core food delivery business grew 17%, generating Rs 6,100 crore in gross revenue for FY24.

In addition to food delivery, its quick commerce vertical, Instamart, posted a gross revenue of Rs 1,100 crore for the year, more than double the Rs 500 crore it earned in the previous fiscal year.

"The continued scale-up in the recent years is driven by an upwards momentum witnessed in demand and supply side factors with (around) 14 million users transacting on our platform at a high frequency of (about) 4.5X. Profitability has sharply improved YoY, as the peak of investments in Instamart is behind us and the business continues to grow rapidly; while the relatively more mature Food delivery business is scaling-up profitably," Swiggy said.

Expenses and financial management

Swiggy's expenses rose by 8% in FY24, amounting to Rs 13,947 crore. Despite the rise in expenses, the company benefited from better operating leverage, allowing it to reduce losses and focus on growth.

Notably, the company reduced spending on marketing and sales promotions by 25.99% from Rs 2,501 crore in FY23 to Rs 1,851 crore in FY24. Employee benefit costs also fell by 6% to Rs 2,012 crore. 

The company’s gross order value from food delivery, Instamart, and dining combined reached around Rs 35,272 crore ($4.2 billion) in FY24, driven by 1.4 crore monthly transacting users.

The food-delivery business, which had an average order value (AOV) of Rs 428, contributed Rs 25,194 crore ($3 billion) and Instamart Rs 8,350 crore ($1 billion).

Raising funds via IPO

According to media reports, Swiggy confidentially filed papers for a $1.25 billion IPO in April this year. The company plans to raise up to Rs 3,750 crore through a fresh issue of equity shares and an offer for sale worth Rs 6,664 crore.

As part of this public listing, it is reportedly targeting a valuation between $12 billion and $15 billion.